China's steel demand recovery speed will lead the world

In 2020, due to the impact of the new coronavirus pneumonia epidemic, global steel demand will shrink by 6.4% to 1.654 billion tons. In 2021, global steel demand is expected to return to 1.717 billion tons, an increase of 3.8% from 2020. However, China's recovery is expected to lead the rest of the world, which will ease the decline in global steel demand in 2020. Recently, the World Steel Association released the results of short-term steel demand forecasts for 2020 and 2021.

Global steel demand will decline.

In 2020, steel demand in advanced global economies is expected to decline by 17.1%. Although the consumer and service industries are the main force in this round of recession, the sluggish consumer spending, the deterioration of the labor market and the collapse of confidence have led to economic chaos and are driving the steel industry. All these facts makes the steel industry generally decline. Spillover effects from massive unemployment and bankruptcy, weak confidence performance and continued social distance measures indicate that steel demand in advanced economies will only partially recover by 7.8% in 2021.

China's steel demand will grow.

The World Steel Association pointed out that China lifted the blockade measures earlier than other countries, and economic activities have gradually recovered since late February. In addition to the hotel industry and tourism, the Chinese economy is rapidly returning to full normalization. In February, China’s economic activity stalled, causing GDP to fall by 6.8% in the first quarter, fixed asset investment by 16.1%, industrial value added by 8.4%, and auto production by 44.6%, the worst hit. But as of the end of April, all major steel-using industries in China have basically returned to normal production levels, although the decline in export demand has hampered the full production and operation of the manufacturing industry.

The World Steel Association believes that due to the severe global economic recession, manufacturing recovery will be slower, but the Chinese auto industry will gain some momentum from stimulus measures. The recovery of Chinese steel demand will become more apparent in the second half of 2020, the construction industry (especially infrastructure investment) will become the main driving force, and a series of new infrastructure construction stimulus measures (the so-called "new infrastructure") have been launched . In 2020, China's steel demand will grow by 1.0%, especially the benefits of the “new infrastructure” project launched will continue into 2021, supporting the demand for steel in 2021.